To the best of our knowledge, during the Track Record Period and as of the Latest Practicable Date, except for (i) five individuals, each of whom being a business operator or shareholder of our distribution partner(s) (or a relative to the business operator or shareholder) who held partnership interests of less than 5% in Kunpeng Investment, as defined in "History, Development and Corporate Structure" section of this Prospectus, and (ii) three individuals who were our former employees, all our distribution partners were Independent Third Parties as none of our distribution partners were controlled by any of our employees, and none of our distribution partners had any business, employment, family or financing relationships with any of our Directors, substantial Shareholders, senior management and employees.
Business · p. 199
The terms of the agreements entered into by the distribution partners affiliated with the seven individuals were consistent with normal commercial terms and were generally in line with our standard form.
Business · p. 199
None of the distribution partners affiliated with the seven individuals made any material contribution to our revenue or received any material advances or financial assistance from us during the Track Record Period.
As of December 31, 2022, 2023, 2024 and June 30, 2025, five, four, four and three franchisees were our former employees, respectively, and they collectively operated eight, seven, seven and seven franchised restaurants at the respective time.
Business · p. 199
We applied the same selection criteria when enrolling the franchisees and the franchise agreements that we entered into with these franchisees contained the similar terms and conditions that we offered to independent franchisees.
As of June 30, 2025, we had 93 franchisees which were our former employees, or were companies controlled by our former employees (the “Former Employee Franchisees”).
Business · p. 258
In addition, the controlling shareholder of Henan Ruizhiming Trading Co., Ltd (河南瑞之茗商貿有限公司) (together with the Former Employee Franchisees and Connected Franchisees, collectively the “Non-independent Franchisees”), which is one of our five largest customers during each period of the Track Record Period, is the spouse of one of our employees.
Business · p. 258
During the Track Record Period, our terms and conditions to transactions with the Non-independent Franchisees are the same with those with the independent franchisees in all material aspects, except for below terms and condition which were insignificant in terms of the impact on our revenue:
To the best of our knowledge, as of the Latest Practicable Date, except for (i) Wuhan Zhongtian Huatuo Intelligent Technology Co., Ltd. (武漢中天華拓智能科技有限公司) (“Wuhan Zhongtian”), an associate of Ms. Zhi, (ii) Hangzhou Yinji, (iii) Shenyang Jingling Technology Co., Ltd. (瀋陽京靈科技有限公司), the shareholder of which was our former employee, and (iv) Shenzhen Zhongjia Management Consulting Co., Ltd. (深圳市衆嘉管理諮詢有限公司), the shareholder of which was our former employee, all of our distributors were independent third parties and none of our distributors were controlled by our former or current employees.
Business · p. 334
The largest shareholder of Hangzhou Yinji served as director of sales (overseas) in Shanghai Renyun, a wholly owned subsidiary of us and left in June 2023 before acquiring Hangzhou Yinji.
Business · p. 324
Save as Hangzhou Yinji, as of the Latest Practicable Date, there were no other past or present relationships (business, employment, shareholding, family, trust, financing or otherwise) between our largest distributors in each period during the Track Record Period, their directors or ultimate beneficial owners, and our Group, our shareholders, our Directors, Supervisors, or senior management, or any of their respective associates.
New Ho Electromechanical is wholly-owned by one individual, who was an employee of our Group between 2020 and 2022.
Business · p. 191
Our Directors confirm that (i) save for the former employment relationship as disclosed above, each of New Ho Electromechanical and its owner is an independent third party and is not a connected person of our Company, its subsidiaries, shareholders, Directors, senior management and their respective associates; (ii) each of New Ho Electromechanical and its owner has not received any funding or financial assistance from our Company, its subsidiaries, shareholders, Directors, senior management and their respective associates; and (iii) the terms of the subcontracts between our Group and New Ho Electromechanical during the Track Record Period were at arm’s length.
There were a limited number of instances during the Track Record Period of our former employees becoming shareholders or legal representatives of certain distributors.
Business · p. 209
Revenue from such distributors amounted to RMB882.0 million, RMB1,292.9 million, RMB719.0 million and RMB259.8 million in 2022, 2023, 2024 and the three months ended March 31, 2025, respectively, accounting for approximately 4.5%, 5.2%, 2.4% and 3.6% of our total revenue during the same period, respectively.
Business · p. 209
There was a distributor during the Track Record period is a company in which a relative of one of our Directors holds a 50% equity interest, and hence a connected person of our Company.
During the Track Record Period, Yisainuo Information Technology, along with its affiliated entities, was one of our top five digital marketing service providers.
Business · p. 226
From June 2003 to August 2017, Mr. Wang Yapeng, our chairman of the Board of Directors and executive Director, served as an executive director, general manager, and/or supervisor of various affiliated entities of Yisainuo Information Technology.
During the Track Record Period, certain of our franchisees were our former employees or then-current employees. As of December 31, 2021, 2022 and 2023 and September 30, 2024, we had 8, 11, 13 and 26 franchisees who were our former employees or our then-current employees, respectively.
Business · p. 223
The revenue contribution from these franchisees was immaterial, collectively accounting for 0.14%, 0.09%, 0.06% and 0.08% of our revenue in 2021, 2022, 2023 and the nine months ended September 30, 2024, respectively.
Business · p. 223
The franchise agreements that we entered into with these franchisees have the same terms and conditions as those in the franchise agreements with other franchisees.
As of December 31, 2021, 2022 and 2023 and September 30, 2024, 13, 18, 29 and 45 of our franchisees, who collectively operated 48, 57, 92 and 112 franchised stores during the respective year/period, were our former employees or relatives of our employees.
Business · p. 197
We sell goods and equipment and provide franchise management services to the non-independent franchisees at the same price that we serve our independent franchisees.
Business · p. 197
Credit terms granted the non-independent franchised stores are fair, reasonable and no more favorable than those offered to the independent franchised stores.
The ultimate beneficial owner of Shanghai Yicunxin held interest in another PRC company, and Far-East Fortune (being our Controlling Shareholder) was one of the founders of Shanghai Yicunxin with 25% equity interest but has disposed of such interest in October 2020.
Business · p. 190
Our revenue from Shanghai Yicunxin amounted to approximately RMB38.2 million, RMB54.7 million, RMB42.3 million and RMB13.2 million for FY2021, FY2022, FY2023 and 6M2024, respectively, representing approximately 11.3%, 14.9%, 9.9% and 9.0% of our total revenue, respectively.
Business · p. 191
An ultimate beneficial owner directly and indirectly holding 38% equity interest in Hunan NiceLife Health Technology Co., Ltd.* (湖南奈斯奈芙健康科技有限公司) was a former employee of our Group.
During the Track Record Period, we had one distributor whose shareholder, director and supervisor were our former employees.
Business · p. 226
In 2021, 2022, 2023 and the six months ended June 30, 2024, the revenue generated from such distributor was RMB0.5 million, RMB0.2 million, RMB23.0 thousand and RMB6.6 thousand, respectively.
Mr. Yiu San Pan is the nephew of Mr. Yiu and Mr. Yiu Wang Lung, whereas Mr. Yiu Hung Wah is the brother of Mr. Yiu and Mr. Yiu Wang Lung.
Business · p. 223
For FY2021/22, FY2022/23, and FY2023/24, the subcontracting fee we paid to World Harvest Construction Limited amounted to approximately HK$15.8 million, HK$2.8 million and HK$0.8 million, respectively, representing 3.7%, 1.0% and 0.2% of our cost of services in the corresponding year respectively.
Business · p. 224
As confirmed by our Directors, the provision of such services between our Group and World Harvest Construction Limited is in the ordinary and usual course of business of our Group and such terms are fair and reasonable.
Our Directors confirm that our sales to such distributors had been on normal commercial terms which were consistent with the terms offered to other distributors.
Business · p. 189
During the Track Record Period, the total revenue from our said three ex-employee distributors amounted to approximately RMB23.3 million, RMB31.4 million, RMB25.2 million and RMB24.7 million, respectively, accounting for approximately 19.2%, 20.3%, 19.9% and 20.4% of our total revenue, respectively.
The legal representative of Shanxi Chengan was previously an employee of our Company and Shanxi Yu'an since 2012 and has more than 10 years' experience in respect of provision of labour subcontracting services.
Business · p. 314
The management of our Company confirmed that prior to leaving our Group, the legal representative of Shanxi Chengan was not a Director, supervisor and/or a member of the senior management of the Group.
Business · p. 314
The purchase from our largest supplier amounted to RMB185.2 million, RMB780.1 million, RMB2,255.1 million and RMB1,073.8 million, representing 2.4%, 4.8%, 14.0% and 18.2% of our total purchase amount for the respective year/period.
As of April 30, 2023, none of our franchisees were our current employees, and 55 or 0.9% of our franchisees were our former employees (“Former Employee-Franchisees”) who were motivated to develop their personal career by partnering with us through franchise arrangements.
Business · p. 186
The franchise agreements that we entered into with these Former Employee-Franchisees contained same terms and conditions that we offered to other third parties.
Business · p. 186
The revenue contribution from our Former Employee-Franchisees, Then-Current Employee Franchisees and Connected Franchisees were immaterial, each accounting for less than 1% of our total revenue for each period during the Track Record Period.
Save as elaborated under the paragraph headed “– Credit Policies and Financial Assistance to Distributors” below, during the Track Record Period, a number of our employees or former employees were shareholders or key personnel of, or were related to, a total of four distributors.
Business · p. 247
During the Track Record Period, such distributors contributed less than 1.9% of our revenue generated from sales of products to offline channels.
Business · p. 247
Our Directors confirm that the sales to such distributors were conducted on an arm’s length basis on normal commercial terms which were fair and reasonable and treated such distributors in an equal manner as the way we treat other independent distributors.
To the best knowledge of our Directors and having made all reasonable enquiries, Customer E includes four entities which were indirectly controlled by Ms. Qi Xiaomin as at the Latest Practicable Date.
Business · p. 272
Ms. Qi Xiaomin is also an ex-employee and business partner of the Remaining Group.
In 2020, 2021 and 2022, the number of distributors who were or were beneficially owned by our former employees totaled 7, 7 and 9, respectively.
Business · p. 171
Revenue generated from such distributors accounted for approximately 0.6%, 0.4% and 0.3% of our total revenue in 2020, 2021 and 2022, respectively.
Business · p. 171
All commercial and operative provisions of our agreements with such distributors are entirely identical to those with any other independent distributors.